Billionaire speculator George Soros reckons America has a problem. He chose a lecture at New York University on Monday to warn the country was “on the verge of a very serious economic correction”.
“We have borrowed an awful lot of money and now the bill is coming to us,” he said.
Coming on the heels of huge write-offs and top-level resignations from investment banks Merrill Lynch and Citigroup, Soros’s comments were well-timed to spook investors.
In US dollar terms, crude oil may be more expensive than it has ever been. Last week prices reached intraday highs of more than $US98 a barrel – the last time prices were that high was in the early 80s, when prices peaked at between $US93 and $US101 in today’s dollar terms, depending on how prices are calculated.
CNN Money quoted Wachovia chief economist John Sylvia as saying the chance of a US recession was 50/50. “The whole game has changed,” he said. “If (high prices are) sustained here, going into the holiday season, you’re going to have a pretty horrendous fourth quarter.”